As US companies emerge from what is now acknowledged as the longest economic downturn of the post-World War II era, they are beginning to prioritize innovation as a primary engine for long-term growth.

Managing the innovation process from concept to implementation is a challenge for any large company. Understanding the core challenges and implementing appropriate measures are central to ensuring a streamlined innovation process that delivers a consistent competitive advantage in a global economy.

Below are some of the key ingredients to successful innovation in a large corporate environment:

Clear direction and vision by senior management – Management must clearly articulate strategic priorities and areas of innovation focus – at the corporate level, at the business unit level, and at the department level. This clarity can help channel innovation in the right direction.

An environment conducive to innovation – Freedom and flexibility for experimentation along with incentives for carrying products from ideation to commercialization provide a strong foundation for an innovative culture.

Clear definition of solution and value proposition – Innovation can take place on several fronts – product, process, or business model. Inventors must clearly articulate the problem statement, the target solution, and the potential value of the proposed solution. A systematic framework leveraging value realization methodology (e.g. Infosys’s VRM) in conjunction with business case analysis and lean principles can help articulate the value of the solution and the resulting benefits to the company.

Prioritization of target initiatives – The proposed ideas and initiatives should generally address the direction and strategic priorities set forth by senior management. Organizations are usually resource constrained. A ‘funnel’ process can help prioritize initiatives so they are well-funded and well-supported for success. However, we must not resort to excessive formal structures as micromanagement will only stifle innovation.

Buy-in/sponsorship from senior management – Disruptive ideas can be weighed down by resistance from individuals and middle managers who are impatient for tangible benefits and who would prefer the trodden path. Sponsorship from senior management is essential to preserve the freedom and flexibility of the innovating team to explore the full potential of the innovation.

A matrixed, multi-disciplinary team – Disruptive innovation usually begins at the fringes of disciplines. A multi-disciplinary team can bring together ideas from disparate disciplines to ‘break the mold’ and work around a new paradigm. An ability to put together small, highly-qualified cross-functional teams quickly in a matrixed environment that transcends organizational boundaries is vital to bringing innovative and disruptive ideas to rapid prototyping and field test. Further, team dynamics and involvement are critical to harmonious creativity.

Early customer integration – Involving a lead customer in early prototyping can help refine product features and quality and accelerate its evolution to mass production.

Ecosystem leverage –Collaborating closely withkey strategic ecosystem partners to leverage their assets during new product development can greatly reduce overall development costs, accelerate time-to-market, mitigate risks, provide access to new markets, and simplify the out-of-the-box customer experience. Continuous re-investment by ecosystem partners can help ensure new product longevity via a common platform strategy and a shared investment-risk-success model.

Clear assessment metrics – Performance metrics and milestones must be put in place that clearly define success criteria at a project level and hold the team accountable. Periodic check-point reviews ensure continuous progress and improvement by various milestones.

Rewards – Timely and visible recognition of inventors is integral in fueling the innovation engine. Rewards must be commensurate with impact/value to the organization. Managers are generally mired in execution challenges and pressured to deliver results over the short-term, and thus do not feel incentivized to sponsor innovation that has a long-term roadmap to fruition. It is therefore equally important to recognize the managers who ‘stick their neck out’ to sponsor innovative initiatives.

Innovation is an ongoing process that needs continuous refinement based on shifting market dynamics, technology progression, and ecosystem/value-chain evolution. Lean processes and a sound infrastructure that nurture the innovation process are fundamental to maintaining the growth engine in a competitive global economy.

Note: This article was originally published by the author at the Infosys Global Engineering Blog where you can find exciting new ideas on how you can improve your business via product innovation and engineering.

Microsoft (NASDAQ:MSFT) has realized that a strong play on the ARM platform is necessary moving forward especially in perspective of the competitive threat of the Google+ARM platform that has manifested strongly in smartphones and tablet devices.

Microsoft and ARM announced a new architecture licensing agreement that underscores the importance of ARM’s architecture on the Windows roadmap and perhaps heralds the game-changing arrival of the era of Windows+ARM based mobile computing and gaming platforms.

ANALYSIS

The convergence between mobile devices and classic desktop/laptop computing devices is resulting in new opportunities in a host of portable consumer devices such as E-readers, Tablets, gaming, media phones, and navigation devices.

While it indulged in the ARM space for smartphones where it failed to get sufficient traction, Microsoft did not see a compelling need to pursue an alternate platform for mobile computing since the WINTEL (Windows + Intel (NASDAQ:INTC)) platform had a stronghold in this sector.

Many prominent portable consumer devices however have now embraced ARM as the platform for such emerging devices. Notable examples include:

ARM’s Cortex A8 and Cortex A9 (with multi-core processing capabilities) platforms at ≥1GHz are cost competitive and more power efficient, and offer a compelling alternative to Intel’s processors for these emerging portable consumer device platforms.

Google (NASDAQ:GOOG), who has challenged Microsoft with new paradigms and business models, has sided with the ARM platform for its thrust into smartphones with its Android OS. This ARM+Android mobile platform has gained momentum among smartphone OEMs incl. Motorola (NYSE:MOT), Samsung, Sony Ericsson, HTC (TPE:2498), LGE, Dell, Acer, etc. that has translated into significant market share gain within smartphones.

Google is aggressively mounting a similar campaign to address the world of tablets, smartbooks, and netbooks leveraging the ARM hardware platform via its Android OS and the Chrome OS platforms.

Google’s royalty-free OS model combined with the cost and power advantage of high-performance ARM processors makes a potent combination that threatens the WINTEL alliance from extending its dominance into the smartbook/tablet/e-reader space. For example, notable players from the PC camp including Dell, Acer, Lenovo, Asus, Samsung, LGE etc. have chosen to introduce Android+ARM based tablets.

Most of these emerging consumer computing devices are ‘communication devices’ that have built in modems. As these devices become mass market plays, cost and power reduction will increasingly drive integrated (applications + modem) processors where ARM-based players Qualcomm (NASDAQ:QCOM), ST-Ericsson, Marvell, Renesas, etc. are well-positioned relative to X86 players (Intel, AMD (NYSE:AMD), VIA).

Microsoft has thus realized that a strong play on the ARM platform is necessary moving forward.

This announcement underscores the importance of ARM’s architecture on the Windows roadmap and perhaps heralds the game-changing arrival of the era of Windows+ARM based mobile computing and gaming devices. The proactive engagement will enable Microsoft to stay in sync with ARM’s roadmap and optimize their leading-edge Windows smartphone and Windows embedded OS platforms with corresponding leading-edge ARM-based products.

One thing is clear. ARM is the winner as Google, Microsoft, Nokia, Samsung, Qualcomm etc. are doing the heavy lifting, and even Apple (with its ARM based A4 chip that is the foundation of its new iPad and iPhone 4) is doing its share.

Note: There’s more valuable insight on smartphones and new wireless frontiers at http://emblazeworld.com/ in the Resources section

With its $200M purchase of Nokia’s wireless modem business, Renesas has made a chess move that is clearly challenging market leader Qualcomm (NASDAQ:QCOM) in the 3G space, as the 3G handset market rapidly grows from ~30% in 2009 (out of 1.15Bu) to a projected 55% (out of 1.5Bu) in 2010. The more immediate threat is perhaps to current Nokia suppliers ST-Ericsson, Broadcom (NASDAQ:BRCM), TI, and Infineon.

The deal, expected to close in the fourth quarter of 2010, is for Nokia’s wireless modem technologies for LTE, HSPA+ and GSM standards. As part of the deal, Nokia will transfer around 1,100 R&D employees to Renesas.

This daring move, especially in the face of recent exits by high profile chipset players from the wireless modem business, affirms Renesas’s commitment to being a full wireless systems platform provider.

Renesas Electronics, founded only recently (April-2010) from the merger of Renesas Technology and NEC Electronics (TYO:6723), is expected to become the world’s third largest semiconductor supplier based on combined revenue. Its scale and breadth of embedded products provide the foundation to be a formidable global wireless platform provider.

Here are some implications of the announced deal.

FOR NOKIA

Unshackles Nokia and removes internal barriers to sign up with any standard chipset offering

Positions Renesas as one of few strong players to offer a complete mobile broadband platform – Application Processors, Basebands, Integrated SoCs, Power Management, RF Transceivers, and Power Amplifiers.

Access to a key customer, and potentially rapid ramp up in volumes globally beyond their traditional Japanese market.

It brings in a strong 3G modem chipset supplier, threatening the dominance and growth of currrent leaders, Qualcomm and ST-Ericsson

With its SH-Mobile S-series applications processor, Reneasas increases competitive pressure in the smartphone processor domain, and especially in the integrated applications+baseband SoC space (where it has considerable experience with the SH Mobile G-series) that includes Qualcomm, ST-Ericsson, Marvell, and Broadcom.

With smartphones poised to be the fastest growing handset segment, RIM is bound to face increased competition from Apple (NASDAQ: AAPL), Nokia (NYSE:NOK), HTC (TPE:2498), Samsung (SEO:A009150), Motorola (NYSE:MOT), and other new entrants.

The increasing popularity of Apple’s iPhone and the rapid onslaught of Android-based smartphones will surely lead to their increased adoption in the corporate world, thus loosening RIM’s stronghold on the enterprise domain. This heat of competition is reflected in the >30% decline of RIM’s (NASDAQ: RIMM) stock value over the last 3 months.

To counter the increasing threat of competition, RIM should:

Expand around core competency – Enterprise applications incl. email

Focus on mid-tier smartphones especially, the sweet spot for high volumes, as smartphones ramp up to be a mass-market play i.e. establish price-point that is maintained at ½ to 2/3 of iPhone

Expand into Emerging Markets (BRIC – Brazil, Russia, India, China) via enterprises, where GPRS/EDGE is still the norm and is adequate for Email/IM etc.

Innovate around Email/SMS to make it user friendly (e.g. speech recognition)

With the rapid growth of data centric smartphones and embedded broadband consumer devices (netbooks, smartbooks, e-readers, mediaphones, etc.), it is clear that the future of wireless is in intelligent web-centric connected devices, applications, and managed services.

Battered by decreasing margins in its handset business, aggressive competitors (e.g. Samsung) nipping at its market share, and intensified competition by disruptive new entrants (Apple, RIM, Google, HTC) in the growing and profitable smartphone segment, Nokia is fighting to regain its innovative edge and find a niche in applications, services, and markets where they will have a sustained competitive advantage and profitable revenue growth.

The one mobile frontier that has shown a lot of promise but has hardly gained momentum is mobile commerce or m-banking. Rather than technical gaps, the most challenging hurdles remain around business issues.

NOKIA MONEY, a new mobile financial service that offers consumers access to basic financial services via mobile devices, is poised to be that silver bullet which transforms Nokia into a revenue generating juggernaut over the long run.

It promises to give a boost to mobile-commerce via NFC (near-field communications), that has long been touted as the technology that will bring about a profound impact on the payment transaction world.

NFC PRIMER

Near Field Communication (NFC) is a standards based wireless communication technology (ISO/IEC 18092 and ECMA-340) allowing two devices to communicate over a short distance of less than 10 cm. The technology is an extension of the ISO 14443 contactless card standard, RFID, that combines the interface of an ISO 7816 smartcard and an RFID reader into a single device. The ubiquitous nature of mobile phones makes these the ideal device to place NFC chip technology.

NFC-enabled mobile handsets can communicate with the present ISO 14443 contactless cards and readers. The mobile handset becomes the subscriber’s key for authorizing payments, accessing services and getting information from their immediate environment. This makes the NFC-enabled handset compatible with existing contactless infrastructure as used in public transport and payment applications.

NFC has major advantages over other wireless technologies:

Its short range provides a degree of security: the user can establish a connection between two devices by simply bringing them together, versus a more complex pairing process (e.g. Bluetooth).

An NFC enabled mobile handset adds the advantage of user interaction (via a display and keypad) and an internet connection. This enables applications like payments, ticket services, access control and loyalty programs

► Nokia could make a significant headway in introducing m-commerce before other e-payment methods reach mass markets. Credit card penetration in emerging markets is still very small. Also, cell phone penetration is far greater (and increasing even more rapidly) in comparison with desktop computers and laptops.

►Nokia can provide ‘certified’ reader technology embedded within the handset – thus promoting per-to-peer transactions between handsets. This removes the obstacle of credit card institutions certifying readers as is the case for POS credit card transactions.

►Nokia Money gives Nokia influence over the value chain (see diagram above)
– HANDSET: Nokia is the OEM
– TSM: OBOPAY (in which Nokia has an investment stake)
– APPLICATION OWNER: For peer-to-peer transactions, Nokia can be the application provider on both the handset and the reader, thus removing dependencies on many 3rd parties

►Emerging markets are mostly ‘retail markets’ (consumer driven) as opposed to ‘operator driven markets’ characteristic of the western world (NA, EU, Japan, etc.). Nokia is thus not at the mercy of TELCOs, and has greater control over the definition and design of handset features.

► There are no regulatory hurdles in emerging markets – Nokia can bypass banks and financial institutions to create its own financial services brand.

►Pre-paid is king in emerging markets. A pre-paid SIM card in a handset can thus act as “cash in an m-wallet”. Merchants can accept m-commerce transactions on their handset readers instantly as credits/top-off to their SIM cards.

►Nokia possesses significant security expertise within the handset and significant brand recognition in emerging markets. This plays well into its long term strategy of strengthening its “trusted and reliable handset company” image.

►With a stake in OBOPAY, their chosen TSM (Trusted Service Manager) partner, Nokia gets the cake and eats it too (little transactional costs passed on to banks)

►In some emerging markets such as India, banks and telcos are set to push mobile banking and m-commerce, and have agreed on a revenue sharing model to roll out mobile banking. This will only enhance the momentum for NOKIA MONEY, as Nokia will be a central player in enabling m-commerce in this market. The Unique Identification Authority of India (UIDAI) is working on an aggressive plan to issue unique IDs to mobilize m-banking. While individual banks and mobile companies would initially work to create closed networks of m-banking systems, UIDAI and the National Payments Corporation of India (NPCI) aim to mobilize interbanking capabilities by 2011.

In summary, NOKIA MONEY could indeed be that profitable revenue machine which transforms Nokia into a formidable services provider it has long yearned for. The question then is — how well will Nokia execute?

★★★ There’s more valuable insight on smartphones and new wireless frontiers at http://emblazeworld.com/ in the Resources section (see whitepapers)

Smartphones are poised to be the fastest growing handset segment in the coming years, rising from 14% of global handset shipments in 2008 (Ref 1) to a projected 32% in 2010 (Ref 2).

Further, smartphones command higher ASPs (average selling price) on the order of US$350 (2008) signaling higher revenue and profitability potential for handset OEMs. This has heightened the intensity of competition among handset makers.

Historically, handsets have evolved more as ‘fat modems’ where application processing and modem communication were all handled on the same chip. On the other hand, application centric devices such as PCs, gaming devices etc. evolved as standalone devices based on discrete applications processors. Connectivity was added on via discrete connectivity modules.

While data speed does impact user experience, application and related services offer many dimensions to differentiate personalization and user experience, thus leading to higher ARPU over voice centric services.

The two worlds are set to collide to create converged devices with vast possibilities (Refs 3 and 4). It also means non-traditional wireless players whose core competency is more on the applications side will enter the fray. For example, Intel is pushing its application processor, Atom, from Netbooks down into Smartphones (Ref. 3). On the other hand, Qualcomm has just announced it is targeting its integrated application and baseband processor, Snapdragon, at Smartbooks (Ref 4).

CRITICAL QUESTION – DISCRETE vs. INTEGRATED PROCESSORS?

The handset designer is now confronted with a daunting choice – the use of a discrete applications processor in conjunction with a discrete baseband processor versus an integrated SoC that combines an applications processor with a baseband processor in a single chip.

Product management and handset designers need to evaluate the trade-offs in reaching an appropriate decision. Here are some key trade-offs that influence the decision process:

Discrete vs. Integrated Smartphone Components

Neither is a silver bullet.

Both have a rightful place and will jostle with each other to dominate this growing segment.

The choice however can have significant implications on product and business competitiveness via such dimensions as system cost, time-to-market, power consumption, flexibility to spin out devices for different communication standards, performance maximization, harmonization of user experience, device form factor (via PCB size & component count) and component supply chain management.

Embedded wireless provides network operators the opportunity of maximizing revenues and profits via the efficient use of network capacity and spectrum assets, and potential revenue sharing from applications and services. At the same time, device OEMs can innovate to open up vast possibilities in the consumer electronics space in ways never imagined before.

More importantly, network operators now have an opportunity to leverage their core competencies and transform themselves from staid bandwidth providers to solutions/managed service providers who help companies leverage embedded wireless to foster innovation & differentiation in new markets, promote new business models, and enhance revenue opportunities ….much like IBM transformed itself from a pure hardware and software player to a solutions and managed services provider.

But many hurdles have to be overcome before embedded wireless can be mainstream in consumer electronic devices. New players, new devices, and new market dynamics will call for creative business models different from the traditional handset business model. The challenges may be categorized into seven key areas.

Embedded wireless heralds a paradigm shift and a new revolution in consumer electronics.The new embedded wireless device world will provide opportunities for all players in the mobile ecosystem – Operators, Device OEMs, Application/VAS developers, System Integrators, Module providers, and Chipset providers.

This is a new frontier and it calls for new ideas and fresh perspectives. Many Operators (AT&T, Sprint, T-Mobile, etc.), OEMs, and consumer electronics companies have created separate divisions, un-shackled from their old ways of doing business, to address this emerging segment.

The opportunity is NOW! Are you ready?

★★★ There’s more info & insight on how you can penetrate the embedded wireless space at http://emblazeworld.com/ in the Resources section (see whitepapers)